Kinder and gentler: physicians and managed care, 1997-2001

Despite the managed care backlash, an overwhelming majority of U.S. physicians continue to contract with managed care health plans. In fact, according to a new Center for Studying Health System Change (HSC) study, between 1997 and 2001 physicians reported a modest increase in the proportion of practice revenue from managed care contracts and the average number of contracts. At the same time, the nature of physicians' relationships with health plans changed, with a significant decrease in plans' use of capitation, or fixed monthly payments for each patient regardless of the amount of care provided. Meanwhile, physician practices moved away from using direct financial incentives to influence doctors' clinical decision making, but did experience an increase in the overall influence of treatment guidelines and other practices commonly associated with managed care.     

The impact of managed care and practice size on primary care physicians' perceived ability to refer

OBJECTIVES: To identify the determinants of primary care physicians' perceived ability to refer patients, to compare perceived ability to refer between solo/two-physician practices and group practices, and to determine the impact of managed care on perceived ability to refer. METHODS: Multivariate analysis using a dataset derived from the Community Tracking Study Physician Survey, 1996-1997. The variables used to explain physicians' perceived ability to refer included physician and practice characteristics as well as aspects of the financial arrangements of managed care. The sample was stratified by practice size. A likelihood ratio test was performed to determine whether there were differences in practice characteristics and managed care financial arrangements that could explain variations in perceived ability to refer between physicians in solo/two-physician and group practices. RESULTS: Perceived ability to refer did not vary much between physicians in solo/two-physician practices and those in group practices. However, the determinants of perceived ability to refer did vary by practice size. The effects of physicians' characteristics were more pronounced among physicians in group practice, whereas the effects of financial arrangements were significant for physicians in solo/two-physician practices. The most significant determinant of perceived ability to refer was primary care physicians' satisfaction in their communication with specialists. CONCLUSION: Group practices are more immune than solo/two-physician practices to external financial arrangements from managed care contracts, possibly through their ability to take advantage of economies of scale and to diversify their sources of funds.     

Physician practices in response to intimate partner violence in southern India: insights from a qualitative study

Health care providers in India are often the only institutional contact for women experiencing intimate partner violence, a pervasive public health problem with adverse health outcomes. This qualitative study was among the first to examine Indian primary care physicians' intimate partner violence practices. Between July 2007 and January 2008, 30 in-depth interviews were conducted with physicians serving low-to-middle income women aged 18-30 in southern India. A modified grounded theory approach was used for data collection and analysis. Study findings revealed a distinct subset of 'physician champions' who responded to intimate partner violence more consistently, informed women of their rights, and facilitated their utilization of support services. Findings also offered insights into physicians' ability to identify indications of intimate partner violence and use of potentially culturally appropriate practices to respond to intimate partner violence, even without training. However, physician practices were mediated by individual attitudes. Although not generalizable, findings offer some useful lessons which may be transferable for adaptation to other settings. A potential starting point is to study physicians' current practices, focusing on their safety and efficacy, as well as enhancing these practices through appropriate training. Further research is also needed on women's perspectives on the appropriateness of physicians' practices, and women's recommendations for intimate partner violence intervention strategies.     

Physician satisfaction with Medicaid managed care: the Missouri experience

BACKGROUND: Medicaid managed care is important to health reform at the state level. However, little is known about physician satisfaction with these programs. We sought to measure this satisfaction in Missouri and determine its predictors. METHODS: We surveyed a random sample of primary care physicians participating in Medicaid managed care (n = 670) or traditional Medicaid (n = 670). Primary outcomes measured were physicians' satisfaction Medicaid managed care, traditional Medicaid and commercial managed care. Satisfaction was measured on a 5-point Likert-type scale. RESULTS: The response rate was 52%. Physicians participating in Medicaid managed care were less likely to be satisfied or very satisfied with Medicaid managed care (28.6%) than with commercial managed care (40%) or their previous experience with traditional Medicaid (39.7%). Among physicians participating in traditional Medicaid, 29.8% were satisfied or very satisfied with traditional Medicaid. Physicians participating in Medicaid managed care were less satisfied with clinical autonomy under that system in comparison with their previous experience with traditional Medicaid (relative difference = 10.8%, P =.001). In multiple linear regression analyses, clinical autonomy (R2 = 0.40) was a strong predictor of overall satisfaction with Medicaid managed care. CONCLUSIONS: Enhancing physicians' clinical autonomy may result in improved satisfaction with Medicaid managed care. State Medicaid agencies should include physician satisfaction as a measure of Medicaid managed care plans' quality.     

Primary care physician incentives in medical group practices

CONTEXT: Although medical groups are adapting to changes in financing health care, little is known about individual physician incentives in this environment. OBJECTIVES: To describe methods group practices use to compensate primary care physicians in a managed care environment and to examine the association of revenue sources for the group practice from all patients and primary care physician incentives. DESIGN: We surveyed by mail group practice administrators for practices that had at least 200 members continuously enrolled in 1995. SETTING: Group practices that had contractual arrangements with Blue Cross/Blue Shield of Minnesota. PARTICIPANTS: One hundred of 129 group practices returned usable surveys. RESULTS: Most groups had some portion of primary care physicians' compensation at risk, although 17 groups compensated them through fully guaranteed annual salary. Seventy-one groups used productivity, 4 groups used quality of care, 1 group used utilization, and 30 used group financial performance. Factors reported to significantly influence primary care physician compensation included billings or charges, overall group practice performance, and net revenue or profit. Groups that had a higher proportion of income from various types of fee-for-service arrangements used lower proportions of base salary for primary care physician compensation and were more likely to relate physician income to measures of productivity. CONCLUSIONS: Substantial variation exists in the types of primary care physician incentives implemented by medical groups. Base salary, individual productivity, and group financial performance were most frequently used to determine compensation. Physician personal financial risk was higher overall in group practices that derived more revenue from fee-for-service contracts.     

Has the influence of managed care waned? Evidence from the market for physician services

Managed care has been the dominant organization of health care coverage in the United States, and seeks to achieve cost control by constraining services. The restrictive practices of managed care organizations have been widely criticized and the role of managed care in constraining health care services may be declining. Physician behavior is also believed to be influenced by the practices of managed care organization. This study examines the evolving nature of managed care and its restrictive effects on the provision of physician services. Physicians can choose whether and to what extent they are involved in managed care, so it is an endogenous decision. We employ instrumental variables method to correct for this endogeneity. Using data from the Community Tracking Study physician surveys from 2000–2001 and 2004–2005, we find that managed care organizations have became relatively less restrictive over time in terms of limiting the provision of physician services, compared to non-managed care organizations. These results suggest that managed care and non-managed care are converging in their effects on the provision of physician services.     

The ethics of managed care. An initial look at physicians' perspectives

The need for medical care in the United States had exceeded the financial resources required to pay for that care. To address this problem, managed care health insurance programs have become commonplace. With managed care programs, however, physicians are facing increasing ethical pressures. This article reviews the ethical dilemmas physicians face under a managed care system and conducts a national random sample of general practitioners and surgeons regarding four major ethical dilemmas: under treatment of patients due to overt pressures or financial incentives, breaches of patient confidentiality by the physician that are required by the managed care plan, lack of disclosure to the patient of the financial incentives or overt pressures under which the physician functions, and overuse of practice guidelines. The results of this survey suggest that physicians are more likely to compromise patients' confidentiality and not discuss financial arrangements with patients than they are to compromise actual patient care. Those physicians with more than 30 percent of their patient load coming from managed care are more likely to have faced the scenarios presented by the survey. There is, however, no statistically significant difference in the physicians' responses to these scenarios based on the percentage of the physicians' patient load coming from managed care.     

The effect of physician practice organization on efficient utilization of hospital resources.

OBJECTIVE. This study examines variations in the efficient use of hospital resources across individual physicians. DATA SOURCES AND SETTING. The study is conducted over a two-year period (1989-1990) in all short-term general hospitals with 50 or more beds in Arizona. We examine hospital discharge data for 43,625 women undergoing cesarean sections and vaginal deliveries without complications. These data include physician identifiers that permit us to link patient information with information on physicians provided by the state medical association. STUDY DESIGN. The study first measures the contribution of physician characteristics to the explanatory power of regression models that predict resource use. It then tests hypothesized effects on resource utilization exerted by two sets of physician level factors: physician background and physician practice organization. The latter includes effects of hospital practice volume, concentration of hospital practice, percent managed care patients in one's hospital practice, and diversity of patients treated. Efficiency (inefficiency) is measured as the degree of variation in patient charges and length of stay below (above) the average of treating all patients with the same condition in the same hospital in the same year with the same severity of illness, controlling for discharge status and the presence of complications. PRINCIPAL FINDINGS. After controlling for patient factors, physician characteristics explain a significant amount of the variability in hospital charges and length of stay in the two maternity conditions. Results also support hypotheses that efficiency is influenced by practice organization factors such as patient volume and managed care load. Physicians with larger practices and a higher share of managed care patients appear to be more efficient. CONCLUSIONS. The results suggest that health care reform efforts to develop physician-hospital networks and managed competition may promote greater parsimony in physicians' practice behavior.     

Liability for managed care decisions: the Employee Retirement Income Security Act (ERISA) and the uneven playing field.

As managed care organizations expand their programs of quality assurance and physician evaluation, more medical malpractice lawsuits may be brought against managed care organizations on the ground that, like hospitals, they are legally responsible for negligent corporate acts that injure patients. However, the federal Employee Retirement Income Security Act (ERISA) shields managed care organizations from liability when they are part of an employee group health plan governed by ERISA. Unlike patients with other types of insurance, patients in ERISA health plans do not have a malpractice remedy for a managed care organization's negligence. A few federal appeals courts recently recognized that ERISA plans can be vicariously liable for their physicians' medical malpractice, but only if the physician is the plan's employee or agent. Yet ERISA still prohibits negligence claims against ERISA health plans for injuries resulting from denial of plan benefits, failure to use qualified physicians, utilization review, or improper plan administration. Current managed care operations do not neatly distinguish between administering benefits and controlling quality of care. Neither should the law. ERISA should be amended to provide employees with the same remedies that patients in non-ERISA plans enjoy.     

Managed care plans and the organizational arrangements with group practices

This article addresses the variety of structural and legal arrangements between group practices and health plans. The continuum of relationships will be discussed, including long-term arrangements whereby in exchange for long-term commitments to provide physician capacity, providers are given a capital contribution from managed care plans; management services organizations whereby managed care plans create management companies that provide turnkey management services in exchange for capital, with a commitment by the group practices to provide physician services to the health plan over a long period of time; mixed equity relationships where physicians and managed care plans jointly own the group practice, which group practice also has an ownership interest in the managed care plan itself; and acquisition of the group practice by the managed care plan. Each of these structures will be described, along with the legal issues that may be considered in any of these relationships.     

Trends in physician participation in Medicaid. The California experience

Physician participation rates in Medicaid vary widely across the country, and, overall, there has been a decline in recent years. We performed an evaluation in California of whether the expansion of Medicaid managed care and a physician payment increase were associated with an increase over time in the percentage of physicians caring for Medicaid patients. Surveys performed before and after these strategies were used did not reveal an increase over time in physicians' participation in California's Medicaid program. Budgetary constraints will force policy makers to confront the priorities of the Medicaid program, to question the policy objectives for physician participation in Medicaid, and to consider more far-reaching reforms in Medicaid and the overall health care system.     

Competition and supplier-induced demand in a health care system with fixed fees.

The present paper examines whether supplier-induced demand exists for primary physician services in Norway. The research design is adapted to the institutional setting of Norwegian primary physician services, where there is a fixed fee schedule. More than 50% of primary care physicians receive a payment for treatment from the National Insurance Administration on a fee-for-item basis. The results showed that increased competition, measured as a high physician:population ratio, led to a decline in the number of consultations per contract physician. However, the contract physicians in high physician density areas did not compensate for the lack of patients by providing more items of treatment in order to maintain their income. Contract physicians' revenue from items of treatment per consultation were unaffected both by physician density and by the number of consultations per contract physician. These results are further corroborated by data that showed that contract physicians' gross revenue and profits were declining functions of physician density. This paper argues that, from an efficiency point of view, a deregulated health care market with fixed fees may operate well.     

Characteristics of medical practices in three developed managed care markets

OBJECTIVE: To describe physician practices, ranging from solo and two-physician practices to large medical groups, in three geographically diverse parts of the country with strong managed care presences. DATA SOURCES/STUDY DESIGN: Surveys of medical practices in three managed care markets conducted in 2000-2001. STUDY DESIGN: We administered questionnaires to all medical practices affiliated with two large health plans in Boston, MA, and Portland, OR, and to all practices providing primary care for cardiovascular disease patients admitted to five large hospitals in Minneapolis, MN. We offer data on how physician practices are structured under managed care in these geographically diverse regions of the country with a focus on the structural characteristics, financial arrangements, and care management strategies adopted by practices. DATA COLLECTION: A two-staged survey consisting of an initial telephone survey that was undertaken using CATI (computerized assisted telephone interviewing) techniques followed by written modules triggered by specific responses to the telephone survey. PRINCIPAL FINDINGS: We interviewed 468 practices encompassing 668 distinct sites of care (overall response rate 72 percent). Practices had an average of 13.9 member physicians (range: 1-125). Most (80.1 percent) medium- (four to nine physicians) and large-size (10 or more physicians) groups regularly scheduled meetings to discuss resource utilization and referrals. Almost 90 percent of the practices reported that these meetings occurred at least once per month. The predominant method for paying practices was via fee-for-service payments. Most other payments were in the form of capitation. Overall, 75 percent of physician practices compensated physicians based on productivity, but there was substantial variation related to practice size. Nonetheless, of the practices that did not use straight productivity methods (45 percent of medium-sized practices and 54 percent of large practices), most used arrangements consisting of combinations of salary and productivity formulas. CONCLUSIONS: We found diversity in the characteristics and capabilities of medical practices in these three markets with high managed care involvement. Financial practices of most practices are geared towards rewarding productivity, and care management practices and capabilities such as electronic medical records remain underdeveloped.     

The effects of institutional change on geographic variation and health services use in the U.S.A

This paper examines the impact of institutional change on patient care. Using panel data on obstetric deliveries from the state of California in the United States between 1983 and 2001, it develops and tests hypotheses predicting impacts of three features of institutional change-managed care insurance, changing professional controls and public attention to cost-control practices-on cesarean use and geographic variation in cesarean deliveries. It finds that managed care insurance promotes the diffusion of cost-effective patient care practices, reducing cesarean use and increasing variation. I found that over time, managed care patients experience continued lower use and reduced geographic variation as new practices become established. The combined effects of changing professional controls-the growing importance of clinical guidelines-and public attention to cost-control practices also diffuses cost-effective practices, increasing variation and decreasing cesarean use. Cesarean use increases and geographic variation declines in a period of managed care retreat in the late 1990s. The analysis extends prior research by documenting the impact of institutional change on health services use and variation and by suggesting that geographic variation is caused, in part, by the diffusion of new patient care practices.     

Effect of managed care and financing on practice constraints and career satisfaction in primary care

BACKGROUND: The shift away from third party insurers to risk-sharing arrangements affecting care management and clinicians could be the most fundamental change in the health care system. Analysis was undertaken to study how managed care, practice setting, and financial arrangements affect physicians' perceived impact on their practice. METHODS: Data were taken from the Community Tracking Study (CTS) physician survey, a national survey of active physicians in the United States fielded between August 1996 and August 1997. Survey instruments were completed by 7,146 primary care physicians in internal medicine (2,355), family practice (3,168), and pediatrics (1,623). The dependent variables are career satisfaction and perceived limitations and pressures on time spent with patients, clinical freedom, income, and continuity. To study the unique effect of financing and gatekeeping arrangements and practice setting, the dependent variables were regressed on gatekeeping, practice revenue, individual physician compensation, practice setting, specialty, age-group, sex, international medical graduate, board certification, and recent change in practice ownership. RESULTS: Total managed care revenue, or individual physician incentives, have no effect on career satisfaction and relatively limited effects on time pressure, income pressure, or patient continuity. In contrast, primary care gatekeeping has a highly significant adverse effect on the same outcome measures. After controlling for financial factors, demographic characteristics, and training differences, physicians in solo and 2-physician practices are significantly more likely to be dissatisfied with their medical career, more likely to report no clinical freedom, and more likely to feel income pressure than physicians in group practices, staff model HMOs, medical schools, or other settings. CONCLUSION: Physicians in solo and 2-physician practices were least satisfied with their careers and reported more constraints on their clinical freedom and income than physicians in other settings. Physicians in group practices or staff model HMOs are more likely to report time pressure than physicians in solo or 2-physician practices. Family practice falls between internal medicine (less satisfied, more practice constraints) and pediatrics (more satisfied, fewer practice constraints).     

Perceptions of medical school seniors of the current changes in the U.S. health care system

Perceptions of medical school seniors about changes occurring in the health care environment were investigated. A survey was completed by 196 Jefferson Medical College seniors in the class of 1997. Of the respondents, 79% believed that cost reduction rather than quality of care is the primary consideration behind recent changes, 78% felt that managed care organizations hamper physicians' abilities to render optimal care, 83% maintained that the control of health care by insurance companies would lead to lower quality of care, 69% agreed that patients should have the freedom to seek a specialist's care without being referred by a primary care physician, 82% recommended that mentally ill patients should be referred to a mental health professional, and 82% believed that learning to work in a managed care environment should be an essential component of medical education. Assessment of student perceptions can assist in the development and implementation of appropriate curricular changes.     

Health beliefs and behaviors of physician assistants in Texas: implications for practice and education

Concern has been expressed over how the volume and effectiveness of physicians' practices relative to prevention can be increased. While a review of the health care services provided by physician assistants in medical practices indicated an emphasis on health education and patient counseling, there has existed an absence of data regarding their beliefs and practices in the area of health promotion. Based upon an analysis of self-reported data from 256 respondents (89%) of a random sample (n = 289) of the 870 physician assistants in Texas, it appears that physician assistants perceive themselves as having a role in health promotion, are generally satisfied with their preventive health care role, view health promotion activities as being more important in the future, and disagree with the idea that health promotion would not be well received by patients. They routinely gather information on health behaviors and discuss or recommend ways to reduce at-risk behavior. Furthermore, while expressing certainty about their knowledge and skills to educate and influence individuals to change certain risk behaviors, physician assistants indicate less certainty about patient follow-through when it relates to such activities as smoking, drinking, and the use of illicit drugs. Considering the perceived challenge and the view that health promotion will become an even larger component of the physician assistant's future role, these findings suggest a need for additional skills training to better assist patients to modify their more complex health risk behaviors.     

The Transition from Medicaid Fee-for-Service to Managed Care Among Private Practitioners in New York City: Effect on Immunization and Screening Rates

Objectives: This study examined the association between participation in Medicaid managed care and up-to-date coverage for childhood immunizations and screenings among private practice physicians serving New York City's poorest neighborhoods. Method: A random sample of 2174 children 3–35 months of age was drawn from 60 physician practices in 1995, and a cross-sectional analysis was used to compare up-to-date status for immunizations, and lead and anemia screening tests, for children cared for by managed care and nonmanaged care physicians. In 1996, an independent sample of 2380 children from the same practices was used to compare up-to-date status for individual children enrolled in Medicaid managed care and children predominantly enrolled in traditional fee-for-service Medicaid. Information from physician interviews augmented chart review data. Chi-square analysis and logistic regression were used. Results: Physicians who participate in Medicaid managed care and those who do not had equal up-to-date coverage for immunizations (41.0 vs. 36.9%, p = .527), and lead (46.8 vs. 38.7%, p = .199) and anemia screening (63.2 vs. 56.5%, p = .272). Measures of the process of care were also similar for the two groups of physicians. Children themselves enrolled in Medicaid managed care appeared significantly more likely to be up-to-date than their nonmanaged care counterparts for immunizations (OR = 1.53, p = .027) and anemia screening (OR = 2.95, p = .000). Conclusions: Participation in managed care does not seem to change physicians' overall preventive care practice behavior. Available data did not reveal major differences in demographics or health status between individual children enrolled in managed care and those not enrolled. That children enrolled in managed care were better immunized and screened than those in fee-for-service Medicaid suggests that physicians receiving compensation under two payment systems may treat children differently depending on each child's mode of reimbursement.     

Back to the future for many hospital-physician relationships: where do we go from here?

Many hospitals, health systems, and large physician group practices have experienced the rise and fall of "managed care," over the past decade or so. The impact has been large and has included the rapid growth and acquisition of physician practices, followed by huge financial losses, and subsequent re-organization, divestiture, and bankruptcies. Regardless, physicians, hospitals, and health systems still face the burden of a rising demand for patient care services. Hospital-physician relationships are still crucial to the health care system. Suggestions with regard to how to analyze your local market and move forward from here to rebuild hospital-physician relationships and care systems are presented and discussed.